State capitalism is an economic system in which the state undertakes commercial (i.e. for-profit) economic activity and where the means of production are organized and managed as state-owned business enterprises (including the processes of capital accumulation, wage labor and centralized management), or where there is otherwise a dominance of corporatized government agencies (agencies organized along business-management practices) or of publicly listed corporations in which the state has controlling shares. Marxist literature defines state capitalism as a social system combining capitalism with ownership or control by a state—by this definition, a state capitalist country is one where the government controls the economy and essentially acts like a single huge corporation, extracting the surplus value from the workforce in order to invest it in further production. This designation applies regardless of the political aims of the state (even if the state is nominally socialist) and some people argue that the modern People's Republic of China constitutes a form of state capitalism and/or that the Soviet Union failed in its goal to establish socialism, but rather established state capitalism.
The term "state capitalism" is also used by some in reference to a private capitalist economy controlled by a state, often meaning a privately owned economy that is subject to statist economic planning. This term was often used to describe the controlled economies of the Great Powers in the First World War. State capitalism has also come to refer to an economic system where the means of production are owned privately, but the state has considerable control over the allocation of credit and investment as in the case of France during the period of dirigisme after the Second World War. State capitalism may be used (sometimes interchangeably with state monopoly capitalism) to describe a system where the state intervenes in the economy to protect and advance the interests of large-scale businesses.
Libertarian socialist Noam Chomsky applies the term "state capitalism" to economies such as that of the United States, where he states that large enterprises that are deemed "too big to fail" receive publicly funded government bailouts that mitigate the firms' assumption of risk and undermine market laws, and where private production is largely funded by the state at public expense, but private owners reap the profits. This practice is often claimed to be in contrast with the ideals of both socialism and laissez-faire capitalism.
There are various theories and critiques of state capitalism, some of which existed before the 1917 October Revolution. The common themes among them identify that the workers do not meaningfully control the means of production and detect that commodity relations and production for profit still occur within state capitalism. In Socialism: Utopian and Scientific (1880), Friedrich Engels argued that state ownership does not do away with capitalism by itself, but rather would be the final stage of capitalism, consisting of ownership and management of large-scale production and communication by the bourgeois state. He argued that the tools for ending capitalism are found in state capitalism.
The term was first used by Wilhelm Liebknecht in 1896 who said: "Nobody has combated State Socialism more than we German Socialists; nobody has shown more distinctively than I, that State Socialism is really State capitalism".
It has been suggested that the concept of state capitalism can be traced back to Mikhail Bakunin's critique during the First International of the potential for state exploitation under Marxist-inspired socialism, or to Jan Waclav Machajski's argument in The Intellectual Worker (1905) that socialism was a movement of the intelligentsia as a class, resulting in a new type of society he termed state capitalism. For anarchists, state socialism is equivalent to state capitalism, hence oppressive and merely a shift from private capitalists to the state being the sole employer and capitalist.
During World War I, using Vladimir Lenin's idea that Czarism was taking a "Prussian path" to capitalism, the Bolshevik Nikolai Bukharin identified a new stage in the development of capitalism in which all sectors of national production and all important social institutions had become managed by the state—he termed this new stage "state capitalism".
After the October Revolution, Lenin used the term positively. In spring 1918, during a brief period of economic liberalism prior to the introduction of war communism and again during the New Economic Policy (NEP) of 1921, Lenin justified the introduction of state capitalism controlled politically by the dictatorship of the proletariat to further central control and develop the productive forces:
Lenin argued the state should temporarily run the economy, which would eventually be taken over by workers. To Lenin, "state capitalism" did not mean the state would run most of the economy, but that "state capitalism" would be one of five elements of the economy:
State capitalism would be a step forward as compared with the present state of affairs in our Soviet Republic. If in approximately six months' time state capitalism became established in our Republic, this would be a great success and a sure guarantee that within a year socialism will have gained a permanently firm hold.
This claim would become standard in anarchist works. For example, the prominent anarchist Emma Goldman in an article from 1935 titled "There Is No Communism in Russia" said of the Soviet Union:
Such a condition of affairs may be called state capitalism, but it would be fantastic to consider it in any sense Communistic [...] Soviet Russia, it must now be obvious, is an absolute despotism politically and the crassest form of state capitalism economically.
Marxism, in fact, becomes ideology. It is assimilated by the most advanced forms of state capitalist movement—notably Russia. By an incredible irony of history, Marxian 'socialism' turns out to be in large part the very state capitalism that Marx failed to anticipate in the dialectic of capitalism. The proletariat, instead of developing into a revolutionary class within the womb of capitalism, turns out to be an organ within the body of bourgeois society [...] Lenin sensed this and described 'socialism' as 'nothing but state capitalist monopoly made to benefit the whole people'. This is an extraordinary statement if one thinks out its implications, and a mouthful of contradictions.
Rather than present an effective and efficient means of achieving revolution, the Leninist model is elitist, hierarchical and highly inefficient in achieving a socialist society. At best, these parties play a harmful role in the class struggle by alienating activists and militants with their organisational principles and manipulative tactics within popular structures and groups. At worse, these parties can seize power and create a new form of class society (a state capitalist one) in which the working class is oppressed by new bosses (namely, the party hierarchy and its appointees).
Another early analysis of the Soviet Union as state capitalist came from various groups advocating left communism. One major tendency of the 1918 Russian communist left criticised the re-employment of authoritarian capitalist relations and methods of production. As Valerian Osinsky in particular argued, "one-man management" (rather than the democratic factory committees workers had established and Lenin abolished) and the other impositions of capitalist discipline would stifle the active participation of workers in the organisation of production—Taylorism converted workers into the appendages of machines and piece work imposed individualist rather than collective rewards in production so instilling petty bourgeois values into workers. In sum, these measures were seen as the re-transformation of proletarians within production from collective subject back into the atomised objects of capital. The working class, it was argued, had to participate consciously in economic as well as political administration. This tendency within the 1918 left communists emphasized that the problem with capitalist production was that it treated workers as objects. Its transcendence lay in the workers' conscious creativity and participation, which is reminiscent of Marx's critique of alienation.
These criticisms were revived on the left of the Russian Communist Party after the 10th Congress in 1921, which introduced the New Economic Policy (NEP). Many members of the Workers' Opposition and the Decists (both later banned) and two new underground Left Communist groups, Gavril Myasnikov's Workers' Group and the Workers' Truth group, developed the idea that Russia was becoming a state capitalist society governed by a new bureaucratic class. The most developed version of this idea was in a 1931 booklet by Myasnikov.
Immediately after the Russian Revolution, many Western Marxists questioned whether socialism was possible in Russia. Specifically, Karl Kautsky said:
It is only the old feudal large landed property which exists no longer. Conditions in Russia were ripe for its abolition but they were not ripe for the abolition of capitalism. Capitalism is now once again celebrating a resurrection, but in forms that are more oppressive and harrowing for the proletariat than of old. Instead of assuming higher industrialised forms, private capitalism has assumed the most wretched and shabby forms of black marketeering and money speculation. Industrial capitalism has developed to become state capitalism. Formerly state officials and officials from private capital were critical, often very hostile towards each other. Consequently the working man found that his advantage lay with one or the other in turn. Today the state bureaucracy and capitalist bureaucracy are merged into one—that is the upshot of the great socialist revolution brought about by the Bolsheviks. It constitutes the most oppressive of all despotisms that Russia has ever had to suffer.
After 1929, exiled Mensheviks such as Fyodor Dan began to argue that Stalin's Russia constituted a state capitalist society. In the United Kingdom, the orthodox Marxist group the Socialist Party of Great Britain independently developed a similar doctrine. Although initially beginning with the idea that Soviet capitalism differed little from western capitalism, they later began to argue that the bureaucracy held its productive property in common, much like the Catholic Church's. As John O'Neill notes:
Whatever other merits or problems their theories had, in arguing that the Russian revolution was from the outset a capitalist revolution they avoided the ad hoc and post hoc nature of more recent Maoist- and Trotskyist-inspired accounts of state capitalism, which start from the assumption that the Bolshevik revolution inaugurated a socialist economy that at some later stage degenerated into capitalism.
Rudolf Hilferding, writing in the Menshevik journal Socialist Courier April 25, 1940 rejected the concept of state capitalism, noting that, as practiced in the Soviet Union, it lacked the dynamic aspects of capitalism such as a market which set prices or a set of entrepreneurs and investors which allocated capital. Thus, state capitalism was not a form of capitalism but a form of totalitarianism.
Leon Trotsky said the term state capitalism "originally arose to designate the phenomena which arise when a bourgeois state takes direct charge of the means of transport or of industrial enterprises" and is therefore a "partial negation" of capitalism. However, Trotsky rejected that description of the Soviet Union, claiming instead that it was a degenerated workers' state. After World War II, most Trotskyists accepted an analysis of the Soviet bloc countries as being deformed workers' states. However, alternative opinions of the Trotskyist tradition have developed the theory of state capitalism as a New Class theory to explain what they regard as the essentially non-socialist nature of the Soviet Union, Cuba, China and other self-proclaimed socialist states.
The discussion goes back to internal debates in the Left Opposition during the late 1920s and early 1930s. Ante Ciliga, a member of the Left Opposition imprisoned at Verkhne-Uralsk in the 1930s, described the evolution of many Left Oppositionists to a theory of state capitalism influenced by Gavril Myasnikov's Workers Group and other Left Communist factions. On release and returning to activity in the International Left Opposition, Ciliga "was one of the first, after 1936, to raise the theory [of state capitalism] in Trotskyist circles". George Orwell, who was an anti-Stalinist leftist like Ciliga, used the term in his Homage to Catalonia (1938).
After 1940, dissident Trotskyists developed more theoretically sophisticated accounts of state capitalism. One influential formulation has been that of the Johnson–Forest Tendency of C. L. R. James and Raya Dunayevskaya who formulated her theory in the early 1940s on the basis of a study of the first three Five Year Plans alongside readings of Marx's early humanist writings. Their political evolution would lead them away from Trotskyism. Another is that of Tony Cliff, associated with the International Socialist Tendency and the British Socialist Workers Party (SWP), dating back to the late 1940s. Unlike Johnson-Forest, Cliff formulated a theory of state capitalism that would enable his group to remain Trotskyists, albeit heterodox ones. A relatively recent text by Stephen Resnick and Richard D. Wolff, Class Theory and History, explores what they term state capitalism in the former Soviet Union, continuing a theme that has been debated within Trotskyist theory for most of the past century.
The left communist/council communist traditions outside Russia consider the Soviet system as state capitalist. Otto Rühle, a major German left communist, developed this idea from the 1920s and it was later articulated by Dutch council communist Anton Pannekoek, for instance in "State Capitalism and Dictatorship" (1936).
From 1956 to the late 1970s, the Communist Party of China and their Maoist or anti-revisionist adherents around the world often described the Soviet Union as state capitalist, essentially using the accepted Marxist definition, albeit on a different basis and in reference to a different span of time from either the Trotskyists or the left-communists. Specifically, the Maoists and their descendants use the term state capitalism as part of their description of the style and politics of Nikita Khrushchev and his successors as well as to similar leaders and policies in other self-styled "socialist" states. This was involved in the ideological Sino-Soviet Split.
After Mao Zedong's death, amidst the supporters of the Cultural Revolution and the "Gang of Four", most extended the state capitalist formulation to China itself and ceased to support the Communist Party of China, which likewise distanced itself from these former fraternal groups. The related theory of Hoxhaism was developed in 1978, largely by Socialist Albanian President Enver Hoxha, who insisted that Mao himself had pursued state capitalist and revisionist economic policies.
Most current communist groups descended from the Maoist ideological tradition still adopt the description of both China and the Soviet Union as being "state capitalist" from a certain point in their history onwards—most commonly, the Soviet Union from 1956 to its collapse in 1991 and China from 1976 to the present. Maoists and "anti-revisionists" also sometimes use the term "social imperialism" to describe socialist states that they consider to be actually capitalist in essence—their phrase, "socialist in words, imperialist in deeds" denotes this.
Murray Rothbard, an anarcho-capitalist philosopher, uses the term interchangeably with the term state monopoly capitalism and uses it to describe a partnership of government and big business in which the state intervenes on behalf of large capitalists against the interests of consumers. He distinguishes this from laissez-faire capitalism where big business is not protected from market forces. This usage dates from the 1960s, when Harry Elmer Barnes described the post-New Deal economy of the United States as "state capitalism". More recently, Andrei Illarionov, former economic advisor to Russian President Vladimir Putin, resigned in December 2005, protesting Russia's "embracement of state capitalism".
However, the term is not used by classical liberals to describe the public ownership of the means of production. The explanation why is given by the Austrian School economist Ludwig von Mises who states that: "The socialist movement takes great pains to circulate frequently new labels for its ideally constructed state. Each worn-out label is replaced by another which raises hopes of an ultimate solution of the insoluble basic problem of Socialism—until it becomes obvious that nothing has been changed but the name. The most recent slogan is "State Capitalism." It is not commonly realized that this covers nothing more than what used to be called Planned Economy and State Socialism, and that State Capitalism, Planned Economy, and State Socialism diverge only in non-essentials from the "classic" ideal of egalitarian Socialism".
On economic issues, Italian Fascist leader Benito Mussolini claimed in 1933 that were Fascism to follow the modern phase of capitalism, its path would "lead inexorably into state capitalism, which is nothing more nor less than state socialism turned on its head. In either event, [whether the outcome be state capitalism or state socialism] the result is the bureaucratization of the economic activities of the nation". Mussolini claimed that capitalism had degenerated in three stages, starting with dynamic or heroic capitalism (1830–1870), followed by static capitalism (1870–1914) and then reaching its final form of decadent capitalism, also known as supercapitalism beginning in 1914.
Mussolini denounced supercapitalism for causing the "standardization of humankind" and for causing excessive consumption. Mussolini claimed that at this stage of supercapitalism "[it] is then that a capitalist enterprise, when difficulties arise, throws itself like a dead weight into the state's arms. It is then that state intervention begins and becomes more necessary. It is then that those who once ignored the state now seek it out anxiously". Due to the inability of businesses to operate properly when facing economic difficulties, Mussolini claimed that this proved that state intervention into the economy was necessary to stabilize the economy.
Mussolini claimed that dynamic or heroic capitalism and the bourgeoisie could be prevented from degenerating into static capitalism and then supercapitalism only if the concept of economic individualism were abandoned and if state supervision of the economy was introduced. Private enterprise would control production, but it would be supervised by the state. Italian Fascism presented the economic system of corporatism as the solution that would preserve private enterprise and property while allowing the state to intervene in the economy when private enterprise failed.
An alternate definition is that state capitalism is a close relationship between the government and private capitalism, such as one in which the private capitalists produce for a guaranteed market. An example of this would be the military–industrial complex in which autonomous entrepreneurial firms produce for lucrative government contracts and are not subject to the discipline of competitive markets.
Both the Trotskyist definition and this one derive from discussion among Marxists at the beginning of the 20th century, most notably Nikolai Bukharin, who in his book Imperialism and the world economy thought that advanced, imperialist countries exhibited the latter definition and considered (and rejected) the possibility that they could arrive at the former.
State capitalism is practised by a variety of Western countries with respect to certain strategic resources important for national security. These may involve private investment as well. For example, a government may own or even monopolize oil production or transport infrastructure to ensure availability in the case of war. Examples include Neste, Equinor and OMV.
There are limits according to arguments that state capitalism exists to ensure that wealth creation does not threaten the ruling elite's political power, which remains unthreatened by tight connections between the government and the industries while state capitalist fears of capitalism's "creative destruction", of the threat of revolution and of any significant changes in the system result in the persistence of industries that have outlived their economic usefulness and an inefficient economic environment that is ill equipped to inspire innovation.
Several European scholars and political economists have used the term to describe one of the three major varieties of capitalism that prevail in the modern context of the European Union. This approach is mainly influenced by Schmidt's (2002) article on The Futures of European Capitalism, in which she divides modern European capitalism in three groups: "Market", "Managed" and "State". Here, state capitalism refers to a system where high coordination between the state, large companies and labour unions ensures economic growth and development in a quasi-corporatist model. The author cites France and to a lesser extent Italy as the prime examples of modern European state capitalism. A general theory of capitalist forms, whereby state capitalism is a particular case, was developed by Ernesto Screpanti, who argued that soviet type economies of the 20th century used state capitalism to sustain processes of primitive accumulation. In their historical analysis of the Soviet Union, Marxist economists Richard D. Wolff and Stephen Resnick identify state capitalism as the dominant class system throughout the history of the Soviet Union.
The theory of state monopoly capitalism was initially a neo-Stalinist doctrine popularised after World War II. Lenin had claimed in 1916 that World War I had transformed laissez-faire capitalism into monopoly capitalism, but he did not publish any extensive theory about the topic. The term refers to an environment where the state intervenes in the economy to protect large monopolistic or oligopolistic businesses from competition by smaller firms. The main principle of the ideology is that big business, having achieved a monopoly or cartel position in most markets of importance, fuses with the government apparatus. A kind of financial oligarchy or conglomerate therefore results, whereby government officials aim to provide the social and legal framework within which giant corporations can operate most effectively. This is a close partnership between big business and government and it is argued that the aim is to integrate labour-unions completely in that partnership.
State monopoly capitalist (stamocap) theory aims to define the final historical stage of capitalism following monopoly capitalism, consistent with Lenin's definition of the characteristics of imperialism in his short pamphlet of the same name. Occasionally the stamocap concept also appears in neo-Trotskyist theories of state capitalism as well as in libertarian anti-state theories. The analysis made is usually identical in its main features, but very different political conclusions are drawn from it.
Ever since monopoly capital took over the world, it has kept the greater part of humanity in poverty, dividing all the profits among the group of the most powerful countries. The standard of living in those countries is based on the extreme poverty of our countries.
The strategic political implication of stamocap theory towards the end of the Joseph Stalin era and afterwards was that the labour movement should form a "people's democratic alliance" under the leadership of the Communist Party with the progressive middle classes and small business against the state and big business (called "monopoly" for short). Sometimes this alliance was also called the "anti-monopoly alliance".
In neo-Trotskyist theory, such an alliance was rejected as being based either on a false strategy of popular fronts, or on political opportunism, said to be incompatible either with a permanent revolution or with the principle of independent working class political action.
The state in Soviet-type societies was redefined by the neo-Trotskyists as being also state-monopoly capitalist. There was no difference between the West and the East in this regard. Consequently, some kind of anti-bureaucratic revolution was said to be required, but different Trotskyist groups quarreled about what form such a revolution would need to take, or could take.
Some Trotskyists believed the anti-bureaucratic revolution would happen spontaneously, inevitably and naturally, others believed it needed to be organised—the aim being to establish a society owned and operated by the working class. According to the neo-Trotskyists, the Communist Party could not play its leading role because it did not represent the interests of the working class.
When Varga introduced the theory, orthodox Stalinist economists attacked it as incompatible with the doctrine that state planning was a feature only of socialism and that "under capitalism anarchy of production reigns".
State capitalism is distinguished from capitalist mixed economies where the state intervenes in markets to correct market failures or to establish social regulation or social welfare provisions in the following way: the state operates businesses for the purpose of accumulating capital and directing investment in the framework of either a free market or a mixed-market economy. In such a system, governmental functions and public services are often organized as corporations, companies or business enterprises.
Many analysts assert that China is one of the main examples of state capitalism in the 21st century. In his book, The End of the Free Market: Who Wins the War Between States and Corporations, political scientist Ian Bremmer describes China as the primary driver for the rise of state capitalism as a challenge to the free market economies of the developed world, particularly in the aftermath of the 2008 financial crisis. Bremmer draws a broad definition of state capitalism as such:
In this system, governments use various kinds of state-owned companies to manage the exploitation of resources that they consider the state's crown jewels and to create and maintain large numbers of jobs. They use select privately owned companies to dominate certain economic sectors. They use so-called sovereign wealth funds to invest their extra cash in ways that maximize the state's profits. In all three cases, the state is using markets to create wealth that can be directed as political officials see fit. And in all three cases, the ultimate motive is not economic (maximizing growth) but political (maximizing the state's power and the leadership's chances of survival). This is a form of capitalism but one in which the state acts as the dominant economic player and uses markets primarily for political gain.
Following on Bremmer, Aligica and Tarko further develop the theory that state capitalism in countries like modern day China and Russia is an example of a rent-seeking society. They argue that following the realization that the centrally planned socialist systems could not effectively compete with capitalist economies, formerly Communist Party political elites are trying to engineer a limited form of economic liberalization that increases efficiency while still allowing them to maintain political control and power.
In his article "We're All State Capitalists Now", British historian and Laurence A. Tisch Professor of History at Harvard University Niall Ferguson warns against "an unhelpful oversimplification to divide the world into 'market capitalist' and 'state capitalist' camps. The reality is that most countries are arranged along a spectrum where both the intent and the extent of state intervention in the economy vary". He then notes:
The real contest of our time is not between a state-capitalist China and a market-capitalist America, with Europe somewhere in the middle. It is a contest that goes on within all three regions as we all struggle to strike the right balance between the economic institutions that generate wealth and the political institutions that regulate and redistribute it.
In the common program set up by the Chinese People's Political Consultative Conference in 1949, in effect the country’s interim constitution, state capitalism meant an economic system of corporatism. It provided that:
Whenever necessary and possible, private capital shall be encouraged to develop in the direction of state capitalism.
Analysis of the "Chinese model" by the economists Julan Du and Chenggang Xu finds that the contemporary economic system of the People's Republic of China represents a state capitalist system as opposed to a market socialist system. The reason for this categorization is the existence of financial markets in the Chinese economic system, which are absent in the market socialist literature and in the classic models of market socialism; and that state profits are retained by enterprises rather than being equitably distributed among the population in a basic income/social dividend or similar scheme, which are major features in the market socialist literature. They conclude that China is neither a form of market socialism nor a stable form of capitalism.
Taiwan's economy has been classified as a state capitalist system influenced by its Leninist model of political control, a legacy which still lingers in the decision-making process. Taiwan's economy includes a number of state-owned enterprises, but the Taiwanese state's role in the economy shifted from that of an entrepreneur to a minority investor in companies alongside the democratization agenda of the late 1980s.
Some Taiwanese economists refer to Taiwan's economy model as "party-state capitalism".
The government of Norway has ownership stakes in many of the country's largest publicly listed companies, owning 37% of the Oslo stockmarket and operates the country's largest non-listed companies including Statoil and Statkraft. The government also operates a sovereign wealth fund, the Government Pension Fund of Norway, whose partial objective is to prepare Norway for a post-oil future.
Singapore's government owns controlling shares in many government-linked companies and directs investment through sovereign wealth funds, an arrangement commonly cited as state capitalism. Singapore has attracted some of the world's most powerful corporations through business friendly legislation and through the encouragement of Western style corporatism, with close cooperation between the state and corporations. Singapore's large holdings of government-linked companies and the state's close cooperation with business are defining aspects of Singapore's economic model.
A new phrase, state-capitalism, has been widely used in mC20, with precedents from eC20, to describe forms of state ownership in which the original conditions of the definition - centralized ownership of the means of production, leading to a system of wage-labour - have not really changed.
A capitalist economy is governed by the laws of the market (analyzed by Marx) and the autonomy of these laws constitutes the decisive symptom of the capitalist system of production
A decade after Taiwan made its democratic transition, the KMT’s Leninist control model has yet to fade from the decision-making process. In short, both China’s and Taiwan’s state capitalism have their roots in the Leninist legacy...To be specific, Taiwan’s state capitalism has experienced a transformation from ‘leviathan as entrepreneur’ in the pre-1989 period to ‘leviathan as a minority investor’ with the agenda of democratization in the late 1980s.
Anarcho-capitalism is a political philosophy and school of anarchist thought that advocates the elimination of centralized state dictum in favor of self-ownership, private property and free markets. Anarcho-capitalists hold that in the absence of statute (law by arbitrary autocratic decrees, or bureaucratic legislation swayed by transitory political special interest groups), society tends to contractually self-regulate and civilize through the spontaneous and organic discipline of the free market (in what its proponents describe as a "voluntary society").In an anarcho-capitalist society, law enforcement, courts and all other security services would be operated by privately funded competitors selected by consumers rather than centrally through "confiscatory" taxation. Money, along with all other goods and services, would be privately and competitively provided in an open market. Personal and economic activities under anarcho-capitalism would therefore be regulated by victim-based dispute resolution organizations under tort and contract law, rather than by statute through centrally determined punishment under political monopolies, which tend to become corrupt in proportion to their monopolization. Business regulations, such as corporate standards, public relations, product labels, rules for consumer protection, ethics, and labor relations would be regulated voluntarily via the use of competitive trade associations, professional societies, and standards bodies; this would, in theory, establish market-recourse for businesses' decisions and allow the market to communicate effectively with businesses by the use of consumer unions, instead of centralized regulatory mandates for companies imposed by the state, which anarcho-capitalists and other libertarians argue is inefficient due to regulatory capture.Various theorists have espoused legal philosophies similar to anarcho-capitalism. However, the first person to use the term was Murray Rothbard who, in the mid-20th century, synthesized elements from the Austrian School of economics, classical liberalism and 19th-century American individualist anarchists Lysander Spooner and Benjamin Tucker (while rejecting their labor theory of value and the norms they derived from it). A Rothbardian anarcho-capitalist society would operate under a mutually agreed-upon libertarian "legal code which would be generally accepted, and which the courts would pledge themselves to follow". This pact would recognize self-ownership, property, contracts, and tort law, in keeping with the universal non-aggression principle (NAP).
Anarcho-capitalists are distinguished from minarchists, who advocate a small Jeffersonian night-watchman state limited to protecting individuals and their properties from foreign and domestic aggression; and from other anarchists who seek to abolish private property (that they distinguish from personal property) and other aspects of capitalism.Anti-Leninism
Anti-Leninism is opposition to the political philosophy Leninism as advocated by Vladimir Lenin.Authoritarian capitalism
Authoritarian capitalism, or illiberal capitalism, is an economic system in which a market economy exists alongside an authoritarian government. Related to and often confused with state capitalism, within authoritarian capitalism individual rights such as freedom of speech and religion are repressed while economic rights such as private property and the functioning of market forces are maintained. There is a large degree of contention around the viability of authoritarian capitalism, with the viability of political repression alongside economic freedom being questioned in the long term.Banana republic
In political science, the term banana republic describes a politically unstable country with an economy dependent upon the exportation of a limited-resource product, such as bananas or minerals. In 1901, the American author O. Henry coined the term to describe Honduras and neighbouring countries under economic exploitation by U.S. corporations, such as the United Fruit Company. Typically, a banana republic has a society of extremely stratified social classes, usually a large impoverished working class and a ruling-class plutocracy, composed of the business, political and military elites of that society. Such a ruling-class oligarchy control the primary sector of the economy by way of the exploitation of labour; thus, the term banana republic is a pejorative descriptor for a servile dictatorship that abets and supports, for kickbacks, the exploitation of large-scale plantation agriculture, especially banana cultivation.In economics, a banana republic is a country with an economy of state capitalism, by which economic model the country is operated as a private commercial enterprise for the exclusive profit of the ruling class. Such exploitation is enabled by collusion between the state and favored economic monopolies, in which the profit, derived from the private exploitation of public lands, is private property, while the debts incurred thereby are the financial responsibility of the public treasury. Such an imbalanced economy remains limited by the uneven economic development of town and country, and usually reduces the national currency into devalued banknotes (paper money), rendering the country ineligible for international development credit.Capitalism
Capitalism is an economic system based on the private ownership of the means of production and their operation for profit. Characteristics central to capitalism include private property, capital accumulation, wage labor, voluntary exchange, a price system, and competitive markets. In a capitalist market economy, decision-making and investment are determined by every owner of wealth, property or production ability in financial and capital markets, whereas prices and the distribution of goods and services are mainly determined by competition in goods and services markets.Economists, political economists, sociologists and historians have adopted different perspectives in their analyses of capitalism and have recognized various forms of it in practice. These include laissez-faire or free market capitalism, welfare capitalism and state capitalism. Different forms of capitalism feature varying degrees of free markets, public ownership, obstacles to free competition and state-sanctioned social policies. The degree of competition in markets, the role of intervention and regulation, and the scope of state ownership vary across different models of capitalism. The extent to which different markets are free as well as the rules defining private property are matters of politics and policy. Most existing capitalist economies are mixed economies, which combine elements of free markets with state intervention and in some cases economic planning.Market economies have existed under many forms of government and in many different times, places and cultures. Modern capitalist societies—marked by a universalization of money-based social relations, a consistently large and system-wide class of workers who must work for wages, and a capitalist class which owns the means of production—developed in Western Europe in a process that led to the Industrial Revolution. Capitalist systems with varying degrees of direct government intervention have since become dominant in the Western world and continue to spread. Over time, capitalist countries have experienced consistent economic growth and an increase in the standard of living.
Critics of capitalism argue that it establishes power in the hands of a minority capitalist class that exists through the exploitation of the majority working class and their labor; prioritizes profit over social good, natural resources and the environment; and is an engine of inequality, corruption and economic instabilities. Supporters argue that it provides better products and innovation through competition, disperses wealth to all productive people, promotes pluralism and decentralization of power, creates strong economic growth, and yields productivity and prosperity that greatly benefit society.Council communism
Council communism (also councilism) is a current of socialist thought that emerged in the 1920s. Inspired by the November Revolution, councilism was characterized by its opposition to state capitalism/state socialism and its advocacy of workers' councils and soviet democracy as the basis for dismantling the class state. Strong in Germany and the Netherlands during the 1920s, council communism continues to exist today within the greater socialist and communist movements.
Chief among the tenets of council communism is its opposition to the party vanguardism and democratic centralism of Leninist ideologies, and its contention that democratic workers' councils arising in the factories and municipalities are the natural form of working class organization and authority. Council Communism also stands in contrast to social democracy through its formal rejection of both reformism and "parliamentarism" (i.e. the compromises and quids pro quo, such as logrolling, normally found in legislative politics).Dirigisme
Dirigisme or dirigism (from French diriger, meaning 'to direct') is an economic doctrine in which the state plays a strong directive role, as opposed to a merely regulatory role, over a capitalist market economy. As an economic doctrine, dirigisme is the opposite to laissez-faire, stressing a positive role for state intervention in curbing productive inefficiencies and market failures. Dirigiste policies often include indicative planning, state-directed investment, and the use of market instruments (taxes and subsidies).
The term emerged in the post-war era to describe the economic policies of France, which included substantial state-directed investment, the use of indicative economic planning to supplement the market mechanism, and the establishment of state enterprises in strategic domestic sectors. It resulted in an unprecedented economic and demographic growth, leading to the coinage of the term Trente Glorieuses ("Thirty Glorious [years]").
The term has subsequently been used to classify other economies that pursued similar policies, most notably the East Asian tiger economies, and more recently the economy of the People's Republic of China. A related concept is state capitalism.
Most modern economies can be characterized as dirigiste to some degree – for instance, the state may exercise directive action by performing or subsidizing research and development of new technologies, through government procurement (especially military) or through state-run research institutes.Ian Bremmer
Ian Arthur Bremmer (born November 12, 1969) is an American political scientist specializing in U.S. foreign policy, states in transition, and global political risk. He is the president and founder of Eurasia Group, a political risk research and consulting firm with offices in New York City, Washington, London, Tokyo, São Paulo, San Francisco, and Singapore. He is the author of several books, including The J Curve, Every Nation for Itself, and the New York Times bestselling Us vs. Them: The Failure of Globalism. As of December 2014, he is foreign affairs columnist and editor-at-large at Time. In 2013, he was named professor at New York University. Eurasia Group provides analysis and expertise about how political developments and national security dynamics move markets and shape investment environments across the globe.Marxism–Leninism
In political science, Marxism–Leninism was the official state ideology of the Soviet Union (USSR), of the parties of the Communist International, after Bolshevisation; and is the ideology of Stalinist political parties. The purpose of Marxism–Leninism is the revolutionary transformation of a capitalist state into a socialist state, by way of two-stage revolution, which is led by a vanguard party of professional revolutionaries, drawn from the proletariat. To realise the two-stage transformation of the state, the vanguard party establishes the dictatorship of the proletariat, which determines policy through democratic centralism.The Marxist–Leninist communist party is the vanguard for the organisation of a capitalist society into a socialist society, which is the lower stage of socio-economic development, and progress towards the upper-stage communist society, which is stateless and classless; yet features organised public-ownership of the means of production, accelerated industrialisation, pro-active development of the productive forces of society, and nationalised natural resources.In the late 1920s, after the death of Lenin, Stalin established universal ideologic orthodoxy among the Communist Party, the USSR, and the Communist International, with his coinage Marxism–Leninism, a term which redefined theories of Lenin and Marx to establish universal Marxist–Leninist praxis for the exclusive, geopolitical benefit of the USSR. In the late 1930s, Stalin's official textbook The History of the Communist Party of the Soviet Union (Bolsheviks) (1938), made the term Marxism–Leninism common, political-science usage among communists and non-communists.Critical of Stalin's political economy and single-party government in the USSR, the Italian Left-communist Amadeo Bordiga said that Marxism–Leninism was a form of political opportunism, which preserved rather than destroyed capitalism, because of the claim that the exchange of commodities would occur under socialism; and the use of popular front organisations by the Communist International; and that a political vanguard organised by organic centralism was more effective than a vanguard organised by democratic centralism. The American Marxist Raya Dunayevskaya dismissed Marxism–Leninism as a type of state capitalism because: (i) state ownership of the means of production is a form of state capitalism; (ii) the dictatorship of the proletariat is a form of democracy, and single-party rule is undemocratic, and (iii) Marxism–Leninism is neither Marxism nor Leninism, but a composite ideology that Stalin used to expediently determine what is communism and what is not communism among the Eastern bloc.Nomenklatura
The nomenklatura (Russian: номенклату́ра, IPA: [nəmʲɪnklɐˈturə]; Latin: nomenclatura) were a category of people within the Soviet Union and other Eastern Bloc countries who held various key administrative positions in the bureaucracy, running all spheres of those countries' activity: government, industry, agriculture, education, etc., whose positions were granted only with approval by the communist party of each country or region.
Virtually all members of the nomenklatura were members of a communist party. Critics of Stalin, such as Milovan Đilas, critically defined them as a "new class". The arch-critic of Stalin, Trotsky used the term caste rather than class, because he saw the Soviet Union as a degenerated workers' state, not as a new-class society. Later developments of Trotsky's theories, such as Tony Cliff's theory of state capitalism, refer to the nomenklatura as a new class. Richard Pipes, an anti-communist Harvard historian, claimed that the nomenklatura system mainly reflected a continuation of the old Tsarist regime, as many former Tsarist officials or "careerists" joined the Bolshevik government during and after the Russian Civil War of 1917-1922.
The nomenklatura forming a de facto elite of public powers in the former Eastern Bloc; one may compare them to the western establishment holding or controlling both private and public powers (for example, in media, finance, trade, industry, the state and institutions).Periodizations of capitalism
A periodization of capitalism seeks to distinguish stages of development that help understanding of features of capitalism through time. The best-known periodizations that have been proposed distinguish these stages as:
Early / monopoly / state monopoly capitalism (Sweezy)
Free trade / monopoly / finance capitalism (Hilferding)
Early capitalism (primitive accumulation) / colonialism / imperialism (Hobson, Lenin, Bukharin)
Extensive stage / intensive stage / late capitalism (Aglietta)The Marxist periodization of capitalism into the stages: agricultural capitalism, merchant capitalism, industrial capitalism and state capitalism.
Another periodization includes merchant capitalism, industrial and finance capitalism, and global capitalism.Primitive socialist accumulation
The primitive socialist accumulation, sometimes referred to as the socialist accumulation, was a concept put forth in the early Soviet Union during the period of the New Economic Policy. It was developed as a counterpart to the process of the primitive accumulation of capital that took place during the early stages and development of capitalist economies. Because the Soviet economy was underdeveloped and largely agrarian in nature, the Soviet Union would have to be the agent of primitive capital accumulation to rapidly develop the economy. The concept was proposed as a means to industrialize the Russian economy through state capitalism because was too underdeveloped to implement socialism at the time.Regulatory capitalism
The term regulatory capitalism suggests that the operation maintenance and development of the global political economy increasingly depends on administrative rules outside the legislatures and the courts.
The general trend despite and beyond the process of liberalization is that of growth rather than decline of regulation. Deregulation may represent trends in some industries (notably finance), but more regulation is the general trend beyond that characterize modern and post-modern capitalism alike. Regulation in this interpretation is an instrument of organizations—states, business, civil and hybrid and is carried at all political arenas and levels.
The concept of regulatory capitalism serves as an alternative to concepts like financial capitalism, welfare capitalism, casino capitalism, developmental capitalism, risk capitalism, state capitalism and crony capitalism in an attempt to shed more light on capitalism as a polymorphous order.Socialist Party of Great Britain
The Socialist Party of Great Britain (SPGB) is a socialist political party in the United Kingdom. Founded in 1904 as a split from the Social Democratic Federation (SDF), it advocates using the ballot box for revolutionary purposes and opposes both Leninism and reformism. It holds that countries which claimed to have established socialism had only established "state capitalism" and was one of the first to describe the Soviet Union as state capitalist. The party's political position has been described as a form of impossibilism.Socialist market economy
The socialist market economy (SME) is the economic system and model of economic development employed in the People's Republic of China. The system is based on the predominance of public ownership and state-owned enterprises within a market economy. The term "socialist market economy" was first used during the 14th National Congress of the Communist Party of China in 1992 to describe the goal of China's economic reforms. Originating in the Chinese economic reforms initiated in 1978 that integrated China into the global market economy, the socialist market economy represents a preliminary or "primary stage" of developing socialism. Despite this, many Western commentators have described the system as a form of state capitalism.State monopoly capitalism
The theory of state monopoly capitalism (also referred as stamocap) was initially a Marxist doctrine popularised after World War II. Lenin had claimed in 1916 that World War I had transformed laissez-faire capitalism into monopoly capitalism, but he did not publish any extensive theory about the topic. The term refers to an environment where the state intervenes in the economy to protect larger monopolistic or oligopolistic businesses from threats.
As conceived by Lenin in his pamphlet of the same name the theory aims to describe the final historical stage of capitalism, of which he believed the Imperialism of that time to be the highest expression.Occasionally the concept also appears in neo-Trotskyist theories of state capitalism as well as in libertarian anti-state theories.
The analysis made is usually identical in its main features, but very different political conclusions are drawn from it.State socialism
State socialism is a classification for any socialist political and economic perspective advocating state ownership of the means of production either as a temporary measure in the transition from capitalism to socialism, or as characteristic of socialism itself. It is often used interchangeably with state capitalism in reference to the economic systems of Marxist–Leninist states such as the Soviet Union to highlight the role of state planning in these economies, with the critics of said system referring to it more commonly as "state capitalism". Libertarian and democratic socialists claim that these states had only a limited number of socialist characteristics. However, Marxist–Leninists maintain that workers in the Soviet Union and other Marxist–Leninist states had genuine control over the means of production through institutions such as trade unions.State socialism is held in contrast with libertarian socialism, which rejects the view that socialism can be constructed by using existing state institutions or by governmental policies. By contrast, proponents of state socialism claim that the state—through practical considerations of governing—must play at least a temporary part in building socialism. It is possible to conceive of a democratic state that owns the means of production, but it is internally organized in a participatory, cooperative fashion, thereby achieving both social ownership of productive property and workplace democracy in day-to-day operations.Statism
In political science, statism is the belief that the state should control either economic or social policy, or both, to some degree.While the term "statism" has been in use since the 1850s, it gained significant usage in American political discourse throughout the 1930s and 1940s. Ayn Rand made frequent use of it in a series of articles in 1962.The End of the Free Market
The End of the Free Market: Who Wins the War Between States and Corporations? is a 2010 non-fiction book by Ian Bremmer, that discusses the rise of state capitalism, a system in which governments dominate local economies through ownership of market-dominant companies and large pools of excess capital, using them for political gain. This trend, Bremmer argues, challenges America's economic strength and the conduct of free markets everywhere.
Marxist phraseology and terminology
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